LPG

Vitol is a pioneer and key physical participant in the LPG market with a presence from wellhead to customer.

Trading LPG worldwide, Vitol handles an average of 10mtpa

Our commitment across the value chain means that we can offer our customers long term supply contracts with rateable deliveries.

We provide a broad range of bespoke logistical solutions to clients, including; floating storage, large and small seagoing cargoes, barges, trains, ship-to-truck facilities.

45+
Years trading LPG
25
Vessels operating globally
10mtpa
Average handling

Seen as a cleaner option to heating oil and coal, LPG emits 33% less CO2 than coal and 12% less than oil, and has the lowest carbon footprint out of all off-grid fossil fuels.

It has also become a major feedstock for the ever growing petrochemical sector.

Our infrastructure – including LPG terminals in Antwerp and Lagos – is complemented by the fleet of 25 vessels that we operate globally.

  • 25 vessels
  • 12 pressurized carriers
  • 3 midsize carriers
  • 10 VLGC

“The infrastructure that supports the distribution network is critical to getting this flexible fuel source to remote locations, and this is an area in which Vitol, working together with Vivo, can make a huge impact on those communities by enabling clean cooking at scale.”

Sebastien Peine

Interview with Sebastien Peine, Head of LPG

Several things; seeing the evolution of the LPG market over the years, the diversity of the participants and customers, and the logistical challenges that the physical trading of LPG entails.

I have witnessed how LPG has evolved over the last two decades; when I started, the global waterborne market was a quarter of what it is today and the main consumer outlet was distribution - essentially LPG cylinders.

Over this time, LPG production has increased substantially, evolving the market and forcing participants - like us - to be creative in finding new and more outlets for the product.
LPG is a by-product, it doesn’t get produced for its own value or demand, it comes with crude oil production and crude refining and also with natural gas production. The latter will become the main source of LPG production in the next 10 years.

In this context, the role of LPG has always been to find a home - it was not a “needed” product initially, but over the years it has found its market and use.

The main markets are cooking and heating gas, and petrochemicals which is now the biggest outlet for LPG, especially propane. The volumes required to support this sector are huge, and because petrochemical units are today built to use LPG exclusively, customers require a long-term reliable supply. This, Vitol is ideally placed to provide – ensuring long term, affordable supply.

Vitol offers all type of logistics, ships and rails, expertise and supply. This commitment across the value chain means that our customers can invest in their own projects and infrastructure, confident in our ability to deliver over the long term.

Logistics are key; LPG is a gas so its storage and transport is expensive and requires capex, extensive infrastructure and assets.

This investment in infrastructure is feasible for large petrochemical projects, but is more challenging for the historical sector of cooking & heating gas. To get the cylinders to the households that need them requires specialist infrastructure and logistics designed to manage and transport the gas safely.

This is why Vitol and Vivo are ideally placed to support the development of LPG infrastructure across the supply chain, especially in Africa where the market growth and impact on communities can be significant.
LPG has a specific and relatively short-term role to play in the energy transition. As the world moves to decarbonise, there is a hierarchy of solutions, privileging renewables whenever possible, or natural gas and LNG as a substitute for more polluting hydrocarbons.

However, natural gas requires very large investments for a sizeable substitution, whereas LPG’s role in the transition is as a more flexible and accessible solution. For example, it’s easy, affordable and quick to convert a gasoline car to use LPG which is both cheaper and cleaner.

Recently LPG carrier engine manufacturers have developed dual fuel engines so that the vessel carrying LPG can also use LPG as a fuel, which results in lower consumption than compliant fuel and also a significantly reduced carbon footprint. Vitol will have 3 of these VLGCs in the fleet in the very near future.

Other areas where LPG has a role could be small power plants in areas where electricity generation is lacking, or other smaller industries that can substitute burning fuel or diesel for LPG.
We’ve seen a lot of innovation and development in LPG over the last five years – its use in the petrochemical industry for example, or in a dual fuel engines to power transport – we’re now in the phase of bedding these in and seeing the impact.
Distribution is a big part of our LPG business, Vitol’s long term client base is in this sector and it supports our global trade.

As I mentioned, the infrastructure that supports the distribution network is critical to getting this flexible fuel source to remote locations, and this is an area in which Vitol, working together with Vivo, can make a huge impact on those communities by enabling clean cooking at scale.

It’s something that we’re committed to – Russell Hardy, Vitol CEO, recently announced our intention to invest $550million by 2030 in infrastructure to support clean cooking and clean cooking projects using our expertise and presence on the ground.

I am convinced that this represents a very good opportunity for both Vitol and Vivo to expand their LPG trading sustainably and for the long term.